aptx_Current_Folio_10Q

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10‑Q

 

 

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2018

 

OR

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                    

Commission File No. 001‑38535

 

 

Aptinyx Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Delaware

 

45‑4626057

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

909 Davis Street, Suite 600

Evanston, IL 60201

(847) 871‑0377

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

 

 

 

 

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).    Yes      No  

 

As of November 13, 2018, the registrant had 33,497,344 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


 

Table of Contents

Table of Contents

 

 

 

 

 

Page

PART I. 

FINANCIAL INFORMATION

5

Item 1. 

Condensed Financial Statements (unaudited) 

5

 

Balance Sheets

5

 

Statements of Operations

6

 

Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity

8

 

Statements of Cash Flows

7

 

Notes to Financial Statements

9

Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3. 

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4. 

Controls and Procedures

26

PART II. 

OTHER INFORMATION

28

Item 1. 

Legal Proceedings

28

Item 1A. 

Risk Factors

28

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3. 

Defaults Upon Senior Securities

72

Item 4. 

Mine Safety Disclosures

72

Item 5. 

Other Information

72

Item 6. 

Exhibits

73

Signatures 

74

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10‑Q contains forward-looking statements that involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10‑Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

·

the timing, progress, and results of preclinical studies and clinical studies for NYX‑2925, NYX‑783, NYX-458, and any future product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the studies will become available, and our research and development programs;

·

the existence or absence of side effects or other properties relating to our product candidates which could delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences following any potential marketing approval;

·

the potential for our identified research priorities to advance our technologies;

·

the potential benefits of, and our ability to maintain our collaboration with, Allergan plc, and establish or maintain future collaborations or strategic relationships or obtain additional funding in connection with these relationships;

·

the potential timelines for our clinical studies or our ability to demonstrate safety and efficacy of our product candidates to the satisfaction of applicable regulatory authorities;

·

our ability to obtain and maintain regulatory approval of our product candidates, NYX-2925, NYX-783, NYX-458, and any other future product candidates, and any statements regarding the label of an approved product candidate, including any restrictions, limitations and/or warnings therein;

·

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering NYX-2925, NYX-783, NYX-458, and any additional product candidates we may develop, and any statements as to whether we do or do not infringe, misappropriate, or otherwise violate any third-party intellectual property rights;

·

our ability and the potential to successfully manufacture our product candidates for clinical studies and for commercial use, if approved;

·

our ability to commercialize our products in light of the intellectual property rights of others;

·

our ability to obtain funding for our operations, including funding necessary to complete further development and commercialization of our product candidates;

·

our plans to research, develop, and commercialize our product candidates;

·

our ability to attract collaborators with development, regulatory, and commercialization expertise;

·

the size and growth potential of the markets for our product candidates and our ability to serve those markets;

·

the rate and degree of market acceptance and clinical utility of NYX‑2925, NYX-783, NYX‑458, and any future product candidates we may develop, if approved;

·

the pricing and reimbursement of NYX‑2925, NYX‑783, NYX‑458, and any future product candidates we may develop, if approved;

·

regulatory developments in the United States and foreign countries;

·

our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

·

the success of competing therapies that are or may become available;

·

our ability to retain the continued service of our key professionals and to identify, hire, and retain additional qualified professionals;

·

the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

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·

the impact of laws and regulations;

·

the use of proceeds from our initial public offering, and

·

our expectations regarding the time during which we will be an “emerging growth company” under the Jumpstart Our Business Startups Act.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or into which we may enter.

You should read this Quarterly Report on Form 10‑Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

Aptinyx Inc.

Condensed Balance Sheets

(unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

    

September 30, 

    

December 31, 

 

 

2018

 

2017

Assets

 

 

 

  

 

  

Current assets:

 

 

 

  

 

  

Cash and cash equivalents

 

$

165,578

 

$

92,136

Restricted cash

 

 

252

 

 

 —

Accounts receivable

 

 

593

  

 

937

Prepaid expenses and other current assets

 

 

1,169

  

 

1,960

Total current assets

 

 

167,592

  

 

95,033

Other assets

 

 

674

 

 

473

Property and equipment, net

 

 

1,813

  

 

1,816

Total assets

 

$

170,079

 

$

97,322

Liabilities, convertible preferred stock, and stockholders’ equity (deficit)

 

 

 

  

 

  

Current liabilities:

 

 

 

  

 

  

Accounts payable

 

$

1,208

 

$

1,537

Accrued expenses and other current liabilities

 

 

6,465

  

 

2,835

Total current liabilities

 

 

7,673

  

 

4,372

Other long-term liabilities

 

 

435

  

 

282

Total liabilities

 

$

8,108

  

$

4,654

Commitments and contingencies (see Note 10)

 

 

 

  

 

  

Convertible preferred stock:

 

 

 

  

 

  

Convertible preferred stock, Series A-1, $0.01 par value, no shares and 151,773 shares authorized,  issued and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

 —

  

 

22,650

Convertible preferred stock, Series A-2, $0.01 par value, no shares and 173,453 shares authorized, issued and outstanding at September 30, 2018 and December 31, 2017, respectively

 

 

 —

  

 

39,979

Convertible preferred stock, Series B, $0.01 par value, no shares and 234,955 shares authorized,  issued and outstanding as of September 30, 2018 and December 31, 2017, respectively

 

 

 —

  

 

69,757

Stockholders’ equity (deficit):

 

 

 

  

 

  

Preferred stock, $0.01 par value, 10,000 and no shares authorized as of September 30, 2018 and December 31, 2017, respectively; no shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively

 

 

 —

 

 

 —

Common stock, $0.01 par value, 150,000 shares authorized,  33,229 issued and outstanding as of September 30, 2018 and 900,000 shares authorized, 5,342 issued and outstanding as of December 31, 2017

 

 

332

  

 

53

Additional paid-in capital

 

 

253,084

  

 

12,486

Accumulated deficit

 

 

(91,445)

  

 

(52,257)

Total stockholders’ equity (deficit)

 

$

161,971

  

$

(39,718)

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)

 

$

170,079

 

$

97,322

 

See accompanying notes to these unaudited condensed financial statements.

 

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Aptinyx Inc.

Condensed Statements of Operations

(unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

 

    

2018

    

2017

    

2018

    

2017

Collaboration and grant revenue

 

$

943

 

$

1,205

 

$

5,535

 

$

3,778

Operating expenses:

 

 

 

  

 

  

 

 

 

  

 

  

Research and development

 

 

11,950

  

 

8,067

 

 

37,860

  

 

24,930

General and administrative

 

 

3,782

  

 

1,318

 

 

7,853

  

 

3,819

Total operating expenses

 

 

15,732

  

 

9,385

 

 

45,713

  

 

28,749

Loss from operations

 

 

(14,789)

  

 

(8,180)

 

 

(40,178)

  

 

(24,971)

Other income

 

 

608

  

 

35

 

 

990

  

 

129

Net loss and comprehensive loss

 

$

(14,181)

 

$

(8,145)

 

$

(39,188)

 

$

(24,842)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.43)

 

$

(1.56)

 

$

(2.48)

 

$

(4.82)

Weighted-average number of common shares outstanding, basic and diluted

 

 

33,191

  

 

5,232

 

 

15,789

  

 

5,159

 

See accompanying notes to these unaudited condensed financial statements.

 

 

 

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Aptinyx Inc.

Condensed Statements of Cash Flows

(unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 

 

    

2018

    

2017

Cash flows from operating activities:

 

 

 

  

 

 

Net loss

 

$

(39,188)

 

$

(24,842)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

  

 

  

Depreciation and amortization expense

 

 

336

  

 

225

Stock-based compensation expense

 

 

1,984

  

 

653

Changes in operating assets and liabilities:

 

 

 

  

 

  

Prepaid expenses and other assets

 

 

356

  

 

(613)

Accounts receivable

 

 

344

  

 

(262)

Accounts payable

 

 

(263)

  

 

839

Accrued expenses and other liabilities

 

 

3,966

  

 

(336)

Net cash used in operating activities

 

 

(32,465)

  

 

(24,336)

Cash flows from investing activities:

 

 

 

  

 

  

Purchases of property and equipment

 

 

(391)

  

 

(1,338)

Net cash used in investing activities

 

 

(391)

  

 

(1,338)

Cash flows from financing activities:

 

 

 

  

 

  

Proceeds from issuance of Series A-2 convertible preferred stock, net issuance of costs

 

 

 —

  

 

39,979

Payment of deferred issuance costs associated with Series B convertible preferred stock financing

 

 

(232)

  

 

 —

Proceeds from stock options exercised

 

 

 2

 

 

 —

Proceeds from initial public offering, net of underwriters discounts

 

 

109,517

  

 

 —

Payment of deferred offering costs

 

 

(2,971)

  

 

 —

Net cash provided by financing activities

 

 

106,316

  

 

39,979

Net increase in cash, cash equivalents, and restricted cash

 

 

73,460

  

 

14,305

Cash, cash equivalents and restricted cash at beginning of period

 

 

92,609

  

 

16,953

Cash, cash equivalents and restricted cash at end of period

 

$

166,069

 

$

31,258

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

  

 

 

Property and equipment purchases not yet paid

 

$

 —

 

$

34

Deferred initial public offering costs not yet paid

 

$

41

 

$

 —

 

See accompanying notes to these unaudited condensed financial statements.

 

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Aptinyx Inc.

Statements of Convertible Preferred Stock and Stockholders’ (Deficit) Equity

(unaudited)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A‑1

 

Series A‑2

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

convertible

 

convertible

 

convertible

 

 

 

 

 

 

 

Additional

 

 

 

 

stockholders’

 

 

preferred stock

 

preferred stock

 

preferred stock

 

 

Common stock

 

paid-in

 

Accumulated

 

equity

 

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

  

  

Shares

    

Amount

    

capital

    

deficit

    

(deficit)

Balance at December 31, 2016

 

151,773

 

$

22,650

 

 —

 

$

 —

 

 —

 

$

 —

 

 

5,049

 

$

50

 

$

11,588

 

$

(20,189)

 

$

(8,551)

Issuance of Series A‑2 convertible preferred stock, net of issuance costs of $21

 

 —

 

 

 —

 

173,453

 

 

39,979

 

 —

 

 

 —

 

  

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Issuance of Series B convertible preferred stock, net of issuance costs of $243

 

 —

 

 

 —

 

 —

 

 

 —

 

234,955

 

 

69,757

 

  

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Issuance of common stock upon vesting of restricted stock awards

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

293

 

 

 3

 

 

(3)

 

 

 —

 

 

 —

Stock‑based compensation

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

 —

 

 

 —

 

 

901

 

 

 —

 

 

901

Net loss

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

 —

 

 

 —

 

 

 —

 

 

(32,068)

 

 

(32,068)

Balance at December 31, 2017

 

151,773

 

$

22,650

 

173,453

 

$

39,979

 

234,955

 

$

69,757

 

  

5,342

 

$

53

 

$

12,486

 

$

(52,257)

 

$

(39,718)

Issuance of common stock upon vesting of restricted stock awards

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

220

 

 

 2

 

 

(2)

 

 

 —

 

 

 —

Stock‑based compensation

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

 —

 

 

 —

 

 

1,984

 

 

 —

 

 

1,984

Conversion of preferred stock upon IPO

 

(151,773)

 

 

(22,650)

 

(173,453)

 

 

(39,979)

 

(234,955)

 

 

(69,757)

 

  

20,306

 

 

203

 

 

132,183

 

 

 —

 

 

132,386

Issuance of common stock upon IPO, net of underwriters’ discount and other offering costs of $2,902

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

7,360

 

 

74

 

 

106,431

 

 

 —

 

 

106,505

Issuance of common stock upon exercise of stock options

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 1

 

 

 —

 

 

 2

 

 

 —

 

 

 2

Net loss

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

  

 —

 

 

 —

 

 

 —

 

 

(39,188)

 

 

(39,188)

Balance at September 30, 2018

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

 

  

33,229

 

$

332

 

$

253,084

 

$

(91,445)

 

$

161,971

 

See accompanying notes to financial statements

 

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Aptinyx Inc.

Notes to Condensed Financial Statements

(Unaudited)

1.           Organization

Description of business

Aptinyx Inc. (the “Company” or “Aptinyx”) was incorporated in Delaware on June 24, 2015 and maintains its headquarters in Evanston, Illinois.

Aptinyx is a clinical‑stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. Aptinyx has a platform for discovering proprietary compounds that work through a novel mechanism: modulation of N‑methyl‑D‑aspartate receptors (“NMDAr”), which are vital to normal and effective brain and nervous system functions. This mechanism has applicability across a number of brain and nervous system disorders.

Initial public offering

On June 20, 2018, the Company’s registration statement on Form S1 (File No. 333‑225150) relating to the initial public offering (“IPO”) of its common stock became effective and on June 25, 2018, the IPO closed. Pursuant to the IPO, the Company issued and sold 7,359,998 shares of common stock at a public offering price of $16.00 per share, which included 959,999 shares sold pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $106.5  million after deducting underwriting discounts and commissions and other offering costs of $3.0 million. The shares began trading on the Nasdaq Global Select Market on June 21, 2018. Upon the closing of the IPO, all of the Company’s outstanding shares of convertible preferred stock automatically converted into 20,306,497 shares of common stock at the applicable conversion ratio.

The Company is also authorized to issue 10 million shares of undesignated preferred stock, par value $0.01, in one or more series. As of September 30, 2018, no shares of preferred stock were issued or outstanding.

Liquidity and capital resources

As of September 30, 2018, the Company had cash and cash equivalents of $165.6 million which the Company believes will be sufficient to funds its planned operations for a period of at least twelve months from the date of issuance of these condensed financial statements.

2.Summary of significant accounting policies

Basis of presentation

The condensed financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2017, and notes thereto, included in the Company’s final prospectus for the IPO filed with the SEC pursuant to Rule 424(b)(4) dated June 20, 2018 (the “Prospectus”).

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise

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discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

Reverse stock split

On June 7, 2018, the Company effected a one-for‑27.58621 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s convertible preferred stock. The par value per share and authorized shares of common and convertible preferred stock were not adjusted as a result of the reverse stock split. All common stock and common stock per share amounts within the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital.

Use of estimates

The financial statements are prepared in conformity with GAAP. This process requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Significant accounting policies

The Company’s significant accounting policies are described in Note 3, “Summary of significant accounting policies,” in the Prospectus. There have been no material changes to the significant accounting policies during the period ended September 30, 2018.

Recently issued accounting pronouncements

In February 2016, the FASB issued ASU No. 2016‑02, Leases (“ASU 2016‑02”), which requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The new standard includes a short‑term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. The new standard will be effective for the Company beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the potential impact ASU 2016‑02 may have on its financial statements.

In May 2014, the FASB issued ASU No. 2014‑09, Revenue from Contracts with Customers (“ASU 2014‑09”), which supersedes nearly all existing revenue recognition guidance. The core principle of ASU 2014‑09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014‑09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. The standard is effective for annual periods beginning after December 15, 2018, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014‑09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is evaluating the impact of the pending adoption of ASU 2014‑09 on the financial statements and has not yet determined the method by which the Company will adopt the standard when required.

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3.           Supplemental financial information

Cash, cash equivalents and restricted cash

Cash and cash equivalents consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the statements of cash flows (amounts in thousands).

 

 

 

 

 

 

 

 

 

As of

 

As of

 

 

September 30, 

 

December 31, 

 

    

2018

    

2017

Cash and cash equivalents

 

$

165,578

 

$

92,136

Short-term and long-term restricted cash

 

 

491

 

 

473

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows

 

$

166,069

 

$

92,609

 

Prepaid expenses and other current assets

 

Prepaid expenses and other current assets consist of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

 

September 30, 

 

December 31, 

 

    

2018

    

2017

Prepaid clinical

 

$

173

 

$

1,718

Prepaid insurance

 

 

791

 

 

137

Other prepaid expenses and current assets

 

 

205

 

 

105

Total prepaid expenses and other current assets

 

$

1,169

 

$

1,960

 

Accrued expenses and other current liabilities

 

Accrued expenses and other current liabilities consist of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

 

September 30, 

 

December 31, 

 

    

2018

    

2017

Employee-related expenses

 

$

2,056

 

$

1,435

Development costs and sponsored research

 

 

1,805

 

 

737

Clinical trials

 

 

2,282

 

 

69

Other

 

 

322

 

 

594

Total accrued expenses and other current liabilities

 

$

6,465

 

$

2,835

 

 

 

4.           Research collaboration agreement with Allergan

On July 24, 2015, the Company entered into a Research Collaboration Agreement (“RCA”) with Naurex Inc., a subsidiary of Allergan plc (“Allergan”), focused on the research and discovery of small molecules that modulate NMDArs. The collaboration is supervised by a Joint Steering Committee (“JSC”) comprising an equal number of representatives from both the Company and Allergan. Under the terms of the agreement, Allergan will pay the Company $1.0 million for each option exercised by Allergan. Under the terms of the agreement, the RCA will terminate upon the earlier of a predetermined anniversary of the RCA or on the date on which Allergan exercises three options to acquire molecules from a pool of eligible compounds. On May 16, 2018, Allergan exercised its option to acquire exclusive rights to develop and commercialize AGN-241751 within a predefined set of indications. For the nine months ended September 30, 2018, the Company recognized the $1.0 million non-refundable milestone payment within collaboration

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and grant revenue in the statements of operations as there were no remaining performance obligations associated with the optioned compound.

The Company accounts for the agreement as a joint risk-sharing collaboration in accordance with ASC 808, Collaboration Arrangements. Costs between the Company and Allergan with respect to each party’s share of development costs that have been incurred pursuant to the RCA are substantially recorded within research and development in the accompanying statements of operations. Reimbursable expenses under the RCA include chemistry, discovery, screening, and profiling efforts around novel NMDAr modulators from the Company’s discovery platform as well as salary of full-time employees at a fixed annual rate for each individual assigned to those efforts, consistent with oversight and guidance of the JSC. Such costs for each compound are considered reimbursable up until the point that the compound is selected by one of the collaboration parties. As such, none of the costs reimbursed by Allergan in any period presented were directly related to the Company’s lead product candidates, NYX-2925, NYX-783, and NYX-458, which the Company selected under the collaboration.

During the three months ended September 30, 2018 and 2017, the Company recorded expenses of $1.9 million and $1.9 million, respectively, for certain development activities in accordance with the terms of the RCA of which 50% was reimbursed by Allergan. The Company received reimbursements of $0.9 million and $1.0 million during the three months ended September 30, 2018 and 2017, respectively. During the nine months ended September 30, 2018 and 2017, the Company recorded expenses of $5.8 million and $5.8 million, respectively, for certain development activities in accordance with the terms of the RCA of which 50% was reimbursed by Allergan. The Company received reimbursements of $2.9 and $2.9 million during the nine months ended September 30, 2018 and 2017, respectively. Such reimbursements were reported within collaboration and grant revenue in the statements of operations.

 

5.           Fair value measurements

ASC 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

·

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

·

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

·

Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying values reported in the Company’s balance sheets for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses are reasonable estimates of their fair values due to the short-term nature of these items.

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Assets measured at fair value as of September 30, 2018 are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

 

 

 

 

 

 

 

 

2018

 

Level 1

 

Level 2

 

Level 3

Assets

 

 

  

 

 

  

 

 

  

 

 

  

Money market funds, included in cash and cash equivalents

 

$

163,705

 

$

163,705

 

$

 —

 

$

 —

Money market funds, included in restricted cash

 

 

252

 

 

252

 

 

 —

 

 

 —

Money market funds, included in other assets

 

 

67

 

 

67

 

 

 —

 

 

 —

 

 

$

164,024

 

$

164,024

 

$

 —

 

$

 —

 

Assets measured at fair value as of December 31, 2017 are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 

 

 

 

 

 

 

 

 

2017

 

Level 1

 

Level 2

 

Level 3

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds, included in cash and cash equivalents

 

$

89,553

 

$

89,553

 

$

 —

 

$

 —

Money market funds, included in other assets

 

 

317

 

 

317

 

 

 —

 

 

 —

 

 

$

89,870

 

$

89,870

 

$

 —

 

$

 —

 

 

 

 

6.           Property and equipment

Property and equipment are as follows (in thousands):

 

 

 

 

 

 

 

 

 

As of

 

As of

 

 

September 30, 

 

December 31, 

 

    

2018

    

2017

Computer software and equipment

 

$

15

    

$

15

Office equipment and furniture

 

 

160

 

 

92

Laboratory equipment

 

 

1,571

 

 

1,529

Leasehold improvements

 

 

1,051

 

 

748

Construction in progress

 

 

 —

 

 

22

Less accumulated depreciation

 

 

(984)

 

 

(590)

Property and equipment, net

 

$

1,813

 

$

1,816

 

Depreciation expense was $0.1 million for each of the three months ended September 30, 2018 and 2017, and $0.4 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively.

 

 

7.           Stock incentive plans

On June 5, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on June 20, 2018. The number of shares available for grant under the Company’s 2018  Plan as of September 30, 2018 was 3,878,940, which includes 505,046 shares of the Company’s common stock reserved under the Company’s 2015 Stock Option and Grant Plan (the “2015 Plan”) that became available for issuance upon the effectiveness of the 2018 Plan. No future issuance will be made under the 2015 Plan.

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Stock‑based compensation expense

Non-cash stock-based compensation expense recognized in the accompanying statements of operations relating to both stock options and restricted stock awards for the three and nine months ended September 30, 2018 and 2017 was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Research and development

 

$

242

 

$

91

 

$

616

 

$

233

General and administrative

 

 

478

 

 

151

 

 

1,368

 

 

420

Total stock‑based compensation expense

 

$

720

 

$

242

 

$

1,984

 

$

653

 

Stock options

The table below summarizes activity related to stock options (in thousands, except per share amounts):

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted‑

    

 

 

 

 

 

 

Weighted‑

 

average

 

 

 

 

 

 

 

average

 

remaining

 

Aggregate

 

 

 

 

exercise

 

contractual

 

intrinsic

Options

 

Shares

 

price

 

term

 

value

Outstanding, December 31, 2017

 

1,498

 

$

2.48

 

8.93

 

$

4,146

Granted

 

2,443

 

 

9.95

 

  

 

 

  

Exercised

 

 1

 

 

1.82

 

 

 

 

 

Forfeited and canceled

 

(5)

 

 

2.77

 

  

 

 

  

Outstanding, September 30, 2018

 

3,937

 

$

7.07

 

8.94

 

$

86,148

Vested and expected to vest at September 30, 2018

 

3,937

 

$

7.07

 

8.94

 

$

86,148

Exercisable at September 30, 2018

 

702

 

$

2.28

 

8.08

 

$

18,739

 

During the nine months ended September 30, 2018 and 2017, the Company granted 2.4 million and 1.2 million stock options, respectively and these options had a weighted-average grant-date fair value of $9.95 and $2.59 per share, respectively. As of September 30, 2018, there was $15.3 million of total unrecognized stock-based compensation expense related to non-vested stock options which is expected to be recognized over a weighted-average period of 3.16 years. The options have a ten-year life and generally vest over a period of four years, subject to continuous employment.

 

Restricted stock awards

 

Non-cash restricted stock award expense recognized in the accompanying statements of operations was $0.1 million for each of the three months ended September 30, 2018 and 2017 and $0.3 million for each of the nine months ended September 30, 2018 and 2017. The total fair value of shares that vested in the nine months ended September 30, 2018 was $1.4 million. At September 30, 2018, there was $0.3 million of unrecognized compensation cost related to 268,000 unvested restricted stock awards that will be recognized as expense over a weighted-average period of 0.91 years.

 

 

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8.         Net loss per share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share data):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(14,181)

 

$

(8,145)

 

$

(39,188)

 

$

(24,842)

Denominator:

 

 

  

 

 

  

 

 

  

 

 

  

Weighted-average common shares outstanding—basic and diluted

 

 

33,191

 

 

5,232

 

 

15,789

 

 

5,159

Net loss per share attributable to common stockholders—basic and diluted

 

$

(0.43)

 

$

(1.56)

 

$

(2.48)

 

$

(4.82)

 

The following common stock equivalents outstanding as of September 30, 2018 and 2017, were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti‑dilutive (in thousands):

 

 

 

 

 

 

 

As of September 30, 

 

    

2018

    

2017

Series A-1 convertible preferred stock

 

 —

 

5,502

Series A-2 convertible preferred stock

 

 —

 

6,288

Stock options issued and outstanding

 

3,937

 

1,497

Unvested restricted stock

 

268

 

655

Total

 

4,205

 

13,942

 

 

 

9.         Income taxes

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, including its net operating losses. Based on its history of operating losses, the Company believes that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of September 30, 2018 and December 31, 2017.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“TCJA”). The TCJA makes significant changes in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a reduction of the amount of the orphan drug credit. As a result of the TCJA, the Company remeasured its ending deferred tax assets and liabilities at December 31, 2017 to the newly enacted U.S. federal corporate tax rate of 21%. The Company recognized the provisional tax impacts related to the remeasurement of the deferred tax assets and liabilities pursuant to SEC Staff Accounting Bulletin No. 118 and included these amounts in its financial statements for the year ended December 31, 2017. The Company did not record any adjustments to this provisional amount during the period ended September 30, 2018 and will continue to analyze and refine its calculations related to the remeasurement as the impact of TCJA is finalized.

 

 

10.         Commitments and contingencies

Contingencies

From time to time, the Company is subject to occasional lawsuits, investigations and claims arising out of the normal conduct of business. The Company has no significant pending or threatened litigation as of September 30, 2018.

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Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown at September 30, 2018. The Company does not anticipate recognizing any significant losses relating to these arrangements.

Leases

The Company enters into various non-cancelable, operating lease agreements for its facilities and equipment in order to conduct its operations. The Company expenses rent on a straight-line basis over the life of the lease and has recorded deferred rent on the Company’s balance sheets within both accrued expenses and other current liabilities and other long-term liabilities.

On July 18, 2018, the Company entered into a sublease agreement for additional office space adjacent to the Company’s existing headquarters in Evanston, Illinois, totaling approximately 6,172 square feet. The term of the lease commenced on July 18, 2018 and continues through September 30, 2022. The total aggregate estimated base rent payments over the term of the sublease approximate $0.9 million.

Total rent expense, inclusive of lease incentives, under all the operating lease agreements amounted to $0.2 million for each of the three months ended September 30, 2018 and 2017, and $0.5 million for each of the nine months ended September 30, 2018 and 2017.

11.         Related party transactions

The Company received consulting services from PharmaKey, LLC (“PharmaKey”) during the three and nine months ended September 30, 2018 and 2017, where the Company’s Chief Development Officer is founder, owner, chairman, and former president. The transactions engaged between the Company and PharmaKey have been reviewed and approved by the Company’s Board of Directors and transacted on an arm’s length basis. As of September 30, 2018, the Company had a balance of approximately $1,000 recorded within accounts payable. The Company incurred consulting services from PharmaKey totaling approximately $1,000 and $34,000 for the three months ended September 30, 2018 and 2017, respectively, and approximately $13,000 and $76,000 for the nine months ended September 30, 2018 and 2017, respectively, which are included within research and development expenses in the statements of operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed financial statements and accompanying footnotes appearing elsewhere in this Quarterly Report on Form 10‑Q and our audited financial statements and related footnotes included in our final prospectus for our initial public offering filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, or the Securities Act, with the Securities and Exchange Commission, or the SEC dated  June 20, 2018, or the Prospectus.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10‑Q , including information with respect to our plans and strategy  for our  business and related financing, includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.” Because of many factors, including those factors set forth in the "Risk Factors" section of this  Quarterly Report on Form 10‑ Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Overview

We are a clinical-stage biopharmaceutical company focused on the discovery, development, and commercialization of novel, proprietary, synthetic small molecules for the treatment of brain and nervous system disorders. We focus our efforts on targeting and modulating N-methyl-D-aspartate receptors, or NMDArs, which are vital to normal and effective function of the brain and nervous system. We believe leveraging the therapeutic advantages of the differentiated modulatory mechanism of our compounds will drive a paradigm shift in the treatment of disorders of the brain and nervous system.

We are advancing a pipeline of distinct product candidates derived from our NMDAr modulator discovery platform. We are currently studying our most advanced product candidate, NYX-2925, in two Phase 2 studies in chronic pain. The first is in subjects with painful diabetic peripheral neuropathy, or DPN, and the second is in subjects with fibromyalgia. We expect to report top-line data from these studies early in the first quarter of 2019. Our second product candidate, NYX-783, has been evaluated in Phase 1 clinical development. We intend to develop NYX-783 for the treatment of post-traumatic stress disorder, or PTSD, and plan to report data from a Phase 2 clinical study in the second half of 2019. We are currently evaluating the safety and tolerability of our third product candidate, NYX-458, in a Phase 1 study, which we expect to complete in the first half of 2019. We intend to develop NYX-458 for the treatment of cognitive impairment associated with Parkinson's disease.

Since our inception in June 2015, we have never generated revenue from the sale of our products and have incurred significant net losses. Our revenue has been primarily derived from a research collaboration agreement with Allergan plc, or Allergan, a development services agreement with Allergan, and research and development grants from the U.S. government. From our inception through September 30, 2018, we have raised an aggregate of $135 million of gross proceeds from sales of our convertible preferred stock and $117.8 million of gross proceeds from our IPO. Our net losses were $32.1 million and $15.5 million for the years ended December 31, 2017 and 2016, and $39.2 million and $24.8 million for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, we had an accumulated deficit of $91.4 million. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:

·

advance the clinical development of our lead product candidates;

·

continue the research and development of our preclinical product candidates; 

·

seek to identify and develop additional product candidates; 

·

seek marketing approvals for any of our product candidates for which we successfully complete clinical development; 

·

develop and expand our sales, marketing, and distribution capabilities for our product candidates for which we obtain marketing approval; 

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·

scale up our manufacturing processes and capabilities to support our ongoing preclinical activities and clinical studies of our product candidates and commercialization of any of our product candidates for which we obtain marketing approval; 

·

maintain, expand, and protect our intellectual property portfolio; 

·

expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts; and 

·

increase our product liability and clinical trial insurance coverage as we initiate our clinical studies and commercialization efforts.

 

We do not expect to generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, which we expect will take a number of years and the outcome of which is uncertain, or enter into collaborative agreements with third parties, the timing of which is largely beyond our control and may never occur. To fund our current and future operating plans, we will need additional capital, which we may obtain through one or more equity offerings, debt financings, or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our preclinical and clinical development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Financial operations overview

Collaboration and grant revenue

We have not generated any revenue from product sales. Our revenue to date has been primarily derived from a research collaboration agreement with Allergan; a development services agreement with Allergan, which was put in place to continue certain development activities for a pre-determined period of time following Allergan's acquisition of Naurex Inc., or Naurex, prior to the spin-out of Aptinyx; and research and development grants from the U.S. government which have no repayment or royalty obligations. The development services agreement with Allergan was terminated in October 2016. Therefore, we have not generated any revenues under this agreement since October 2016 and do not expect to generate revenues in the future under this agreement.

Operating expenses

Research and development expenses

Research and development activities account for a significant portion of our operating expenses. We expense research and development costs as incurred. Research and development expenses consists of costs incurred in connection with the development of our product candidates, including:

·

fees paid to consultants, sponsored researchers, and contract research organizations, or CROs, including in connection with our preclinical and clinical studies, and other related clinical study fees, such as for investigator grants, patient screening, laboratory work, clinical study database management, and statistical compilation and analysis;

·

costs related to acquiring and maintaining preclinical and clinical study materials and facilities;

·

costs related to compliance with regulatory requirements; and

·

costs related to salaries, bonuses, and other compensation for employees in research and development functions.

At this time, we cannot reasonably estimate or know the nature, timing, and costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash

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inflows will commence from sales of our products, if approved. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty related to:

·

future clinical study results; the scope, rate of progress, and expense of our ongoing as well as any additional preclinical studies, clinical studies and other research and development activities;

·

clinical study enrollment rate;

·

clinical study design;

·

the manufacturing of our product candidates;

·

our ability to obtain and maintain intellectual property protection for our product candidates;

·

significant and changing government regulation;

·

the timing and receipt of any regulatory approvals; and

·

the risks disclosed in the section entitled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.

A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs, timing, and viability associated with the development of that product candidate.

We expect our research and development expenses to increase over the next several years as we continue to implement our business strategy, which includes advancing our product candidates into and through clinical development, expanding our research and development efforts, seeking regulatory approvals for any product candidates for which we successfully complete clinical studies, accessing and developing additional product candidates, and hiring additional personnel to support our research and development efforts. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical studies. As such, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation. General and administrative expenses also include rent as well as professional fees for legal, consulting, accounting, and audit services.

In the future, we expect that our general and administrative expenses will increase as we increase our headcount to support our continued research and development and the potential commercialization of our product candidates, if approved. We also anticipate that we will incur increased accounting, audit, legal, tax, regulatory, compliance, and director and officer insurance costs, as well as investor and public relations expenses associated with maintaining compliance with exchange listing and SEC requirements.

Other income

Other income consists primarily of the interest income earned on our cash and cash equivalents.

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Results of operations

Comparison of the three months ended September 30, 2018 and 2017

The following table summarizes our results of operations for the three months ended September 30, 2018 and 2017 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

    

Three months

    

 

 

 

 

ended September 30, 

 

Increase

 

 

2018

 

2017

 

(Decrease)

Collaboration and grant revenue

 

$

943

 

$

1,205

 

$

(262)

Operating expenses:

 

 

  

 

 

  

 

 

  

Research and development

 

 

11,950

 

 

8,067

 

 

3,883

General and administrative

 

 

3,782

 

 

1,318

 

 

2,464

Total operating expenses

 

 

15,732

 

 

9,385

 

 

6,347

Loss from operations

 

 

(14,789)

 

 

(8,180)

 

 

6,609

Other income

 

 

608

 

 

35

 

 

573

Net loss and comprehensive loss

 

$

(14,181)

 

$

(8,145)

 

$

6,036

 

Collaboration and grant revenue

Revenue was $0.9 million for the three months ended September 30, 2018, compared to $1.2 million for the three months ended September 30, 2017. The decrease of $0.3 million was primarily driven by a reduction in our research and development costs incurred under our grants from the U.S. government as our outstanding grants were completed in the first half of 2018, and accordingly, we did not generate  any grant-related revenues for the three months ending September 30, 2018.

Research and development expenses

The following table summarizes our research and development expenses incurred during the three months ended September 30, 2018 and 2017 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

    

Three months

    

 

 

 

 

ended September 30, 

 

Increase

 

 

2018

 

2017

 

(Decrease)

NYX-2925

 

$

5,791

 

$

2,392

 

$

3,399

NYX-783

 

 

360

 

 

604

 

 

(244)

NYX-458

 

 

867

 

 

336

 

 

531

Preclinical research and discovery programs

 

 

1,710

 

 

2,077

 

 

(367)

Personnel and related costs

 

 

3,222

 

 

2,658

 

 

564